Governance quality and information asymmetry

Elbadry, Ahmed, Gounopoulos, Dimitrios and Skinner, Frank (2015) Governance quality and information asymmetry. Financial Markets, Institutions And Instruments, 24 (2-3). pp. 127-157. ISSN 0963-8008

[img] PDF - Accepted Version
Restricted to SRO admin only

Download (1MB) | Request a copy

Abstract

This paper explores the relation between corporate governance and asymmetric information. We find that proxies for governance mechanisms that encourage the monitoring of managers are inversely related to proxies for asymmetric information. Specifically, greater board independence, board activeness and debt financing is significantly and inversely related to the degree of asymmetric information as reflected in bid-ask spreads, volatility of share returns, normalised share trade volumes and market value of shares traded. This implies that corporate governance mechanisms that enhance managerial monitoring lead to improvements in the informational environment of the firm.

Item Type: Article
Keywords: Corporate Governance Mechanisms, Asymmetric Information, Agency Theory
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HG Finance > HG4001 Finance management. Business finance. Corporation finance
Depositing User: Dimitrios Gounopoulos
Date Deposited: 12 Sep 2014 14:02
Last Modified: 07 Mar 2017 10:19
URI: http://sro.sussex.ac.uk/id/eprint/49917

View download statistics for this item

📧 Request an update